Clearwire Corp. posted robust first quarter financial results highlighted by company record customer growth, but more importantly the company used its quarterly conference call to intriguing insight into its future network and device plans. Of significant importance was Clearwire’s statement that the company recently amended an agreement with Intel Corp. that will allow either party to provide 30 days notice before exiting their current agreement that requires Clearwire to continue exclusive use of WiMAX technology on its network through early 2012. The agreement was originally part of Intel’s investment into Clearwire in support of Intel’s plans to build up the burgeoning WiMAX chip market.This amendment would seem to open the door for Clearwire to follow up on its proclamation of being “technology neutral” and move forward with plans to install an LTE-based technology on its network. Analysts have been forecasting an eventual migration to LTE for Clearwire, a fact Clearwire’s management has said it has been looking at. However, the agreement with Intel has to this point prevented an actual deployment of any technology beyond WiMAX using Clearwire’s substantial spectrum holdings in the 2.5 GHz band, which the carrier said is around 150 megahertz in the nation’s top 100 markets. A move to LTE could open up the door to additional wholesale partners for Clearwire. Recent rumors have indicated that Clearwire has been in talks with T-Mobile USA Inc. on a possible partnership that would allow T-Mobile USA to offer next-generation services using Clearwire’s network to supplement T-Mobile USA’s current HSPA-based data service. In addition, Sprint Nextel would be seen as a likely passenger on any LTE plans as the carrier is a majority shareholder in Clearwire and its current “4G” service runs on Clearwire’s network. The move could also provide a compelling competitive answer to both Verizon Wireless, which is on track to cover 100 million pops with its LTE network by year’s end, as well as AT&T Mobility, which has said it would begin trialing LTE on its network beginning next year.Another factor that could see Clearwire move towards LTE was the recent $1.8 billion acquisition of SkyTerra Communications Inc. by Harbinger Capital Partners that has stipulations requiring the company cover up to 190 million pops with the 30 megahertz of spectrum it picked up within five years. Harbinger has reportedly been in talks with several wireless companies about hosting services on its planned LTE network. While not commenting directly on Harbinger’s plans, Clearwire CEO Bill Morrow proclaimed “We welcome competition,” as it expands consumer interest in mobile data services.Whether Clearwire decides to deploy additional technologies on its network, the carrier noted that with the groundwork for network coverage and support already in place, any additional deployments could be made at considerably lower costs. The carrier explained that after talking with its infrastructure partners, it expected a simple radio deployment would run around 15% of the costs of a new network deployment.Clearwire also clarified its market roll out plans for the rest of the year on its way to covering 120 million potential customers. The carrier said it was currently at around 50 million pops covered following recent announcements, with plans to launch service in 19 additional markets this summer, including Kansas City; St. Louis; Salt Lake City; and Nashville, Tenn., before finishing up its deployments later this year in around a dozen more markets, including New York, Los Angeles and Boston.In support of its broader coverage, Clearwire said it was working very closely on a pair of WiMAX-enabled smartphones from Samsung Electronics Co. Ltd. and HTC Corp. that were not related to similar devices set to launch from Sprint Nextel. The company noted that it was not ready yet to unveil details on the devices, though it did note that it was likely initial voice support for the smartphones would be handled using a traditional cellular network – presumably Sprint Nextel’s – with plans for a Voice over Internet Protocol solution as the transport method once it’s network provided sufficient coverage.Q1 numbersAs for its quarterly results, Clearwire said it added 283,000 new customers to its network during the first quarter, including 172,000 direct additions to its Clear-branded service and 111,000 through its wholesale partners Sprint Nextel Corp., Comcast Corp. and Time Warner Cable. The growth pushed the company’s total customer base to 971,000 customers, which included 814,000 direct customers and 157,000 customers added through its network partners.The strong quarterly growth was a significant improvement compared with the 25,000 customers it added during the first quarter of 2009 and 87,000 subscribers it added during the fourth quarter of last year. One interesting note from its customer growth results were that one-third of net additions through its wholesale partners came from markets where the carrier did not yet offer its 4G service, with customers in those markets presumably taking advantage of dual-mode devices that offered support for Sprint Nextel’s CDMA2000 1x EV-DO Revision A-based network. Clearwire’s management said this was beneficial as it was seeding a soon-to-launch market with WiMAX-capable devices and bringing in revenues prior to an official launch.Revenues for the first quarter jumped 72% year-over-year to $106.7 million, and were a 33% increase compared with the $79.9 million Clearwire reported for the fourth quarter of last year. The increase was driven by customer growth as well as an increase in average revenue per user to $42.77.However, along with the increased revenues came an increase in expenses related to its market build outs that pushed Clearwire’s net losses up 32% sequentially from a loss of $71.1 million during the fourth quarter of 2009 to a loss of $94.1 million during the first quarter. Clearwire’s management said it expected the losses to continue through the rest of this year due to its aggressive market launch plans.Clearwire also reported that its headcount had increased from 2,000 employees at the end of the first quarter of 2009 to nearly 3,600 employees this year. It expected that number to continue to grow this year in support of its network launches, but said that most of that growth would come at the market level and not in its executive or management ranks.

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Editor-in-Chief, Telecom Software, Policy, Wireless Carriers[email protected]
Dan Meyer started at RCR Wireless News in 1999 covering wireless carriers and wireless technologies. As editor-in-chief, Dan oversees editorial direction, reports on news from the wireless industry, including telecom software, policy and wireless carriers, and provides opinion stories on topics of concern to the market such as his popular Friday column “Worst of the Week.”